Hospital purchasing slammed by auditors as 'poor value for money'

Hospitals in England are paying more for basic
supplies than they should because a lack of central purchasing control is
hampering efficient buying, according to the National Audit Office (NAO).

In a report published today, the NAO said fragmented
purchasing of basic supplies, including medical equipment and stationery,
represents “poor value for money”. The spend amounts to £4.6 billion a year.

The NAO estimated at least £500 million could be
saved annually if trusts bought in a more collaborative way. The government’s
plans to decentralise the NHS puts efficient buying at risk, it added, because
it secures no commitment from hospitals to purchase a single item or class of
supplies.

Trusts are not getting value for money because
they purchase many different types of the same product. This included 21 varieties
of A4 paper, 652 types of medical gloves and 1,751 different cannulas (plastic
tubes inserted into the body) across all hospitals. This also varied
significantly between hospitals. While one trust bought 13 different kinds of
gloves, another purchased 177 types.

Although trusts can use regional procurement hubs
and a national supplies and distribution organisation, the report said, “there
is no requirement for them to do so”, and they are free to buy directly from
suppliers. Some hospitals were incurring unnecessary administrative costs by making
multiple, small purchase orders.

Amyas Morse, NAO comptroller and auditor general,
said in a statement: “Today’s report points out that with no central control
over foundation trusts, the [health] department cannot mandate more efficient
procurement practices.

“Given the scale of the potential savings which
the NHS is currently failing to capture, we believe it is important to find
effective ways to hold trusts directly to account to parliament for their
procurement practices.”

The majority of hospital trusts - 129 out of 165 -
are foundation trusts which are outside the Department of Health’s (DH)
direct control. Under the Health and Social Care Bill, the government hopes to
turn all hospital trusts into foundation trusts.

Margaret Hodge MP, chair of the Committee of Public Accounts
(PAC) said it was “unacceptable” for hospitals to pay more than they need. “Problems
to date have been caused by insufficient coordination between hospitals trusts.
This report makes clear that individual trusts acting alone will only be able
to make limited improvements in the future.”

By 2015, the NHS must find £15 billion to £20 billion
of annual efficiency savings. “NHS Trusts need to get more business-like and
ensure they are making the most of their combined spending power to deliver the
best value for taxpayers and patients,” said Elizabeth Wells, head of public
services reform at the CBI.

A DH statement said: "The more
efficient the NHS becomes, the more we can invest back into patient care. That
is why it's so important for hospitals to deal with wasteful procurement. While
it is up to local hospitals to decide how they purchase products, government has
a role in providing support and robust information. We are therefore considering
launching a review to help hospitals get better value for money from procurement,
drawing on the expertise of government advisers."